Did federal health privacy rules override South Carolina medical record copy fees for workers’ compensation claims?

Plain-English summary

A senator asked whether federal health information regulations took precedence over South Carolina's fee rule for medical records related to workers' compensation claims. In a November 2002 informal opinion, an Assistant Attorney General said the state provision did not necessarily conflict with the federal individual-access fee rule. He stressed that this conclusion was “not free from doubt.” The letter did not give a definitive approval for every fee the state statute mentioned.

The opinion compared the state law's copying, search and handling, postage, and tax charges with the federal rule's reasonable cost-based fee for an individual's copy of protected health information. It recognized an opposing view that a handling charge was prohibited. Its conclusion was limited to whether the state provision was preempted under the federal regulation discussed.

Currency note

This opinion was issued in 2002. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did the AG say federal regulations automatically displaced the state record-fee rule? A: No. The opinion said only a contrary state requirement, or one obstructing federal objectives, was preempted and found preemption here uncertain.

Q: Was the state handling charge clearly permitted by the federal rule? A: The AG did not resolve that point. He noted a contrary legal view that the federal rule barred a handling charge.

Q: Was this a formal Attorney General opinion?
A: No. The letter said it was an informal opinion by the signing Assistant Attorney General and had not been personally reviewed by the Attorney General.

Background and statutory framework

The letter compared South Carolina's §42-15-95 with 45 CFR §164.524(c)(4), which specified allowable costs for an individual's copy of protected health information. It also discussed the federal regulations' test for when state law is contrary to a federal privacy requirement.

Citations and references

• §42-15-95: the state medical-record fee provision under review.
• 45 CFR §164.524(c)(4): the federal copy-fee regulation discussed.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/november-7-2002/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/04/02nov-7-bauer.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
CHA RLIE C ONDON
ATIORNEY GENERAL

November 7, 2002

The Honorable Andre Bauer
Senator, District No. 18
Post Office Box 142
Columbia, South Carolina 29202

Re:

Your Letter of October 28, 2002
S.C. Code Ann. §42-15-95

Dear Senator Bauer:
In your above-referenced letter, you indicate that, on behalf of a constituent, you are seeking an opinion from this Office " ... as to whether the State or the Federal regulations regarding charges for medical records takes precedence in South Carolina." With your letter, you include materials provided by your constituent related to the request. The materials indicate that the constituent is concerned with the effect of regulations promulgated by the U.S. Department of Health and Human Services on the application ofS.C. Code Ann. §42-15-95. Your constituent's question turns on whether Section 42-15-95 is preempted by the federal regulations.

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LAW I ANALYSIS

Preemption Generally
Federal preemption of state law is rooted in the second clause of Article VI of the United States Constitution (the Supremacy Clause). The Supremacy Clause provides, in pertinent part, that" ... the Laws of the United States ... shall be the supreme Law of the Land; and the judges of every state shall be bound thereby, anything in the Constitution or laws of any state to the contrary notwithstanding." In determining whether federal laws preempt state laws, congressional intent must be examined. Fidelity Federal Savings and Loan Association v. de la Cuesta, 458 U.S. 141 (1982). Courts have held that Congress' intent to preempt is shown when it is physically impossible to comply with both federal and state regulation, the nature of the subject matter requires federal supremacy and uniformity or if the Congress has clearly intended to displace state legislation. Florida Lime and Avocado Growers, Inc. v. Paul, 373 U.S. 132 (1963). Federal regulations preempt state law to the same extent as federal statutes. Fidelity Federal Savings and Loan Association v. de la Cuesta, 458 U.S. at 153.

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BUI LDING

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POST O FFICE Box

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TELEPHONE: 803-734-3970

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FACSIM ILE : 803-253-6283

The Honorable Andre Bauer
Page2
November 7, 2002

South Carolina Law
S.C. Code Ann. §42-15-95 provides, in pertinent part, that
All existing information compiled by a health care facility, as defined in Section 44-7-130, or a health care provider Iicensed pursuant to Title 40 pertaining directly to a workers' compensation claim must be provided to the insurance carrier, the employer, the employee, their attorneys, or the South Carolina Workers' Compensation Commission, within fourteen days after receipt of written request. A health care facility and a health care provider may charge a fee for the search and duplication of a medical record, but the fee may not exceed sixty-five cents per page for the first thirty pages and fifty cents per page for all other pages, and a clerical fee for searching and handling not to exceed fifteen dollars per request plus actual postage and applicable sales tax. The facility or provider may charge a patient or the patient's representative no more than the actual cost of reproduction of an X- ray. Actual cost means the cost of materials and supplies used to duplicate the X-ray and the labor and overhead costs associated with the duplication. Section 42-15-95 provides that a fee may be charged for the production of health care information based on a per page copying cost, the cost of searching for and handling the information (not to exceed $I 5 .00 per request), the cost of postage and any sales tax involved.

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Federal Re2ulations
The federal regulations relevant to the question at hand have been promulgated by the Department of Health and Human Services ["HHS"]. The specific regulation at issue is found at 45 C.F.R. § 164.524 and is entitled "Access of individuals to protected health information." Generally, Section 164.524 provides a right of access to certain health information and provides that, with some exceptions, " ... an individual has a right of access to inspect and obtain a copy of protected health information about the individual .... " Section 164.524(c)(4) relates to fees that may be charged to an individual for obtaining copies of the information and provides:
... If the individual requests a copy of the protected health information or agrees to a summary or explanation of such information, the covered entity may impose a reasonable, cost-based fee, provided that the fee includes only the cost of: (i) Copying, including the cost of supplies for and labor of copying, the protected health information requested by the individual; (ii) Postage, when the individual has requested the copy, or the summary or explanation, be mailed; and (iii) Preparing an explanation or summary of the protected health information, ifagreed to by the individual as required by paragraph (c)(2)(ii) of this section Section 160.203 relates to "Preemption of State Law" and, with certain exceptions, provides that "[a] standard, requirement, or implementation specification adopted under this subchapter (subchapter includes §164.524) that is contrary to a provision of State law preempts the provision of State law. Section 160.202 sets forth a definition of"contrary" as used in Section 160.203 and states that "Contrary,

The Honorable Andre Bauer
Page 3
November 7, 2002
when used to compare a prov1s1on of State law to a standard, requirement, or implementation specification adopted under this subchapter, means: (1) A covered entity would find it impossible to comply with both the State and federal requirements; or (2) The provision of State Jaw stands as an obstacle to the accomplishment and execution of the full purposes and objectives of part C oftitle XI of the Act or section 264 of Pub.L. 104-191, as applicable." Effect of HHS Reeulations on State Law It is apparent that HHS intended to preempt state Jaw in the field of access to health care information and the cost of providing health care information. It is further clear, however, that HHS did not intend to preempt the field entirely. Rather, only those state laws that are contrary to HHS regulation or stand as an obstacle to the goals of the federal laws which necessitated the regulations are preempted.

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As mentioned above, Section 42-15-95 allows for a fee to be charged for copying costs, searching and handling costs, the cost of postage and any applicable sales tax. It appears that the fee allowed for in Section 42-15-95 could be considered a "cost-based fee" as provided for in 45 CFR
§ 164.524(c)(4). That is, a fee for per page copying costs and searching and handling costs do not appear to be clearlyinco11travention of the allowance in Section l 64.524(c)(4)(i) for a fee" ... including the cost
__ of supplies for and labor of copying .... " Further, Section 164.524(c)(4)(ii) specifically allows for a fee based on the cost postage. This conclusion, however, is not free from doubt. The materials provided to this Office with your request include a Jetter concerning Section 164.524(c )(4) from general counsel for a member corporation of the Association of Health Information Outsourcing Services. The letter concludes that Section 164.524(c)(4) prohibits a state law which allows a fee to be charged for "handling" a request for health information. CONCLUSION

HHS regulations preempt state laws that are contrary to the regulations or stand as an obstacle to the goals of the federal laws which necessitated the regulations. It does not necessarily appear that S.C. Code Ann. §42-15-95 is contrary to HHS regulations or that it stands as an obstacle to federal laws in the field of access to health information. Therefore, S.C. Code Ann. §42-15-95 may not be preempted by 45 CFR §164.524(c)(4). This conclusion, however, is not free from doubt. This letter is an informal opinion only. It has been written by a designated Assistant Attorney General and represents the position of the undersigned attorney as to the specific question asked. It has not, however, been personally scrutinized by the Attorney General and not officially published in the manner of a formal opinion. Sincerel ,

DK.A/an

David K. Avant
Assistant Attorney General

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